UAE based Fils, a Blockchain enabled digital platform for launching sustainable focused products has signed an MOU with Mashreq Bank, a financial institution in MENA.

The partnership will develop a corporate carbon offsetting offering that helps corporate and institutional clients to integrate carbon offsetting directly from their Mashreq corporate accounts.

In a bid to eliminate the deceptive practice of misrepresenting environmental responsibility through greenwashing, Fils infrastructure uses blockchain technology to track all carbon credits used to avoid double counting and provide transparency.

The MoU was signed at Mashreq’s Global HQ by Nameer Khan, founder of Fils; and Mashreq’s Head of Corporate and Investment Banking Group, Joel D Van Dusen, with the support of the UAE’s Chief Trade Negotiator and Assistant Undersecretary for International Trade Affairs at the Ministry of Economy, H.E. Juma Al Kait.

The agreement represents the first step in Mashreq’s development of specialized carbon-offsetting blockchain enabled financial products, which will launch in collaboration with selected UAE-based Mashreq corporate clients. With the initial solution expected in the first half of 2024, the announcement represents a critical milestone for the region’s financial sector, underlining a significant shift towards incorporating environmental responsibility within the region’s financial practices.

Within the UAE, carbon credits are an increasingly important part of the decarbonization strategy. The partnership between Mashreq and Fils will create a solution that solves a number of historic challenges, including the fact that trading markets are not typically accessible directly by corporates.

The account will also solve the problem of minimum purchase amounts that typically apply, whereas FILS will provide fractionalized credits. This removes the complexity and accessibility of dealing directly with the carbon credit markets and simplifies the purchasing, auditing, and reporting through Mashreq.

Joel D Van Dusen, Head of the Corporate and Investment Banking Group at Mashreq, said, “This initiative will have a broad impact on Mashreq’s corporate clients, offering a solution designed to contribute towards environmental sustainability. It also reinforces the UAE’s position as a pioneer in integrating sustainability into its economic and financial sectors, aligning with the nation’s role in hosting COP28 and its ambition to lead global sustainability efforts. Furthermore, the pioneering initiative signifies Mashreq’s dedication to sustainable practices.”

The new carbon offsetting corporate offering from Mashreq is a unique product that reflects the growing use of carbon credits. 41% of global companies plan to use carbon credits to meet their  carbon reduction targets, and the carbon credit market is expected to grow at a 30% CAGR over the coming years.

Nameer Khan, Founder of Fils, said, “Fils’ partnership with Mashreq in the development of a ground-breaking carbon offsetting product is a powerful catalyst for the evolution of ESG enforcement across the region’s financial markets.  Created with transparent KPIs, the accounts spell the end of greenwashing and clear a path towards greater accountability and implementation of actionable outcomes that can improve the sustainability of the world we live in.”